Click here for SAL's Annual Report 2007 (published with Shipping Australia magazine, March edition each year) containing SAL's major policy issues and activities for 2006-2007.

Air pollution & greenhouse gas emissions

The need to reduce Greenhouse Gas (GHG) emissions and the significant contribution by the maritime industry to improve performance in this respect has been acknowledged by the world shipping community.

The EU’s announcement that it will take unilateral action to reduce Greenhouse Gas (GHG) emissions from ships if there is no global action by the end of the year is viewed with concern by the shipping industry, especially as around 40% of the world’s fleet is controlled by European owners. The EU believes that bringing shipping into the Emissions Trading Scheme (ETS) would be the best way to address the GHG emissions from shipping. Currently both shipping and aviation are excluded from emission targets under the Kyoto protocol.

The IMO is working to prevent such unilateral action by revising the emission limits in MARPOL Annex VI. MARPOL Annex VI has only addressed reductions of Sulphur Oxide (SOx) and nitrogen oxides (NOx). It is expected that the revised MARPOL Annex VI would include a two-tiered approach to reducing NOx, regulations for Volatile Organic Compounds (VOC) emissions and regulations limiting particulate matter (PM) from ships.

The marine sulphur cap is currently set at a level many times higher than what is commonly used in land based mobile transportation sources in many countries. The impact of ship emissions on worldwide air quality is expected to grow as marine transportation grows. The US Environmental Protection Agency estimates that by 2030 marine diesel engines on Ocean Going Vessels (OGV) will account for 28 percent of U.S. mobile source NOx emissions, about 20 percent of US mobile source direct Particulate Matter (PM) emissions, and about 83 percent of U.S. mobile source SOx emissions.

To address the long-term reductions in both PM and SOx from ships, IMO is considering tightening of the sulphur limits applicable in existing Sulphur Emission Control Areas (SECAs) and reduction in the global fuel sulphur standard. Many believe that the PM and SOx emissions can be reduced through the use of seawater SOx scrubbers or with the use of low sulphur distillate fuel. Scrubbers are said to be capable of reducing SOx emissions by about 95% and they can also achieve substantial reductions in PM. Some have argued that fitting scrubbers to ships is impractical due to their size. The cost of scrubbers varies from 2-4 percent of the cost of a new building.

A switch from residual fuel to distillate product to reduce (SOx) emissions as proposed by some may result in increased Carbon and PM emissions, higher fuel/shipping costs, and may result in a move towards other modes of transport (which are not as energy efficient as shipping), along with an inability of refineries to produce sufficient quantities to fulfil demand and there are problems with disposing of the additional waste and the GHG that they produce in the process.

It has been acknowledged that using distillate fuels could be the most practical way to comply with new emission regulations but the additional cost to the shipping industry will be extremely high (in the billions of dollars). Regulations could be introduced which dictate that distillate fuels will have to be used within a certain distance from land (e.g. 50 nautical miles), within the foreseeable future but this is also the subject of current debate.

The average sulphur content of tested fuel oil has decreased from 2.70% to 2.59% since 2005. A study has revealed that around 600-800 million tonnes of CO2 is emitted by shipping annually. Currently 70,000 ships use about 280 million tonnes of fuel a year; this figure is expected to rise to about 400 mullion tonnes by 2020. Carbon dioxide emissions from shipping could rise by as much as 75% in the next 15 to 20 years if world trade continues to grow and no action is taken. It is possible that regulations could be introduced in the near future reducing the sulphur content in marine fuel to around 1%.

SAL fully supports the International Chamber of Shipping’s view proposing a new goal-based approach to emissions reduction and calls for a holistic consideration of emission reduction measures. It draws attention to the need to take account of the environmental justification for improvements proposed, and to consider fully the relationship between measures to reduce local air pollution, such as sulphur, and the subsequent implications for CO2/greenhouse gas emissions. ICS believes that there should be choice with regard to compliance measures.

The National Greenhouse and Energy Reporting Act 2007 (NGER Act) establishing a national framework for Australian corporations to report greenhouse gas emissions, reductions, removals and offsets, and energy consumption and production, from 1 July 2008 was passed through parliament in late 2007. Regulations to underpin the administrative and technical arrangements of the NGER Act are being developed in advance of the system’s commencement, to provide certainty to industry of their obligations and the Australian Government will consult further with stakeholders on the detail of the national reporting system. The Act lays the foundation for an Australian Emissions Trading System and data reported under this Act will form the basis of emissions liabilities under emissions trading and will inform decision making during the establishment of an emissions trading system, including with regard to permit allocation and incentives for early abatement action.

Initial reading of the Act appears to indicate that Australian flag vessels will come within the ambit of the Act. SAL will continue to monitor developments.

Amendments to MARPOL Annex 1 for the Prevention of Marine Pollution during Oil Transfer Operations between Ships at Sea

IMO is considering making amendments to MARPOL Annex I to address the technical and operational issues relating to the potential risk of pollution during ship to ship transfer of oil cargoes at sea (STS), taking into account the principles of international maritime law, for example UNCLOS, and the rights and obligations of coastal and flag States.

The potential risk of pollution during ship to ship transfer of oil cargo is recognised together with the fact that for 20 years when such operations have been conducted in accordance with IMO and industry guidelines the vast majority have been carried out safely and with minimal environmental impact. Concern is expressed that the checklists proposed and the draft text do not adequately serve the purpose of clear implementation and enforcement in compliance with UNCLOS. A number of issues have yet to be resolved.

Regulations for ship to ship transfer operations (STS) proposed appear to be unnecessarily onerous. SAL will give careful attention to the discussion at IMO to ensure an outcome is reached that is both practical and pragmatic while avoiding unnecessarily onerous technical requirements that add nothing to safety or protection of the marine environment but do add significantly to the administrative burden on ship’s officers.

Ballast Water Management

The International Convention for the Control and Management of Ships' Ballast Water and Sediments, an international Convention to prevent the potentially devastating effects of the spread of harmful aquatic organisms carried by ships' ballast water was adopted on 13 February 2004. It will enter into force 12 months after ratification by 30 States, representing 35 per cent of world merchant shipping tonnage. The Convention requires all ships to implement a Ballast Water and Sediments Management Plan. All ships will have to carry a Ballast Water Record Book and will be required to carry out ballast water management procedures to a given standard. Parties to the Convention are given the option to take additional measures which are subject to criteria set out in the Convention and in conformity with IMO guidelines.

It is likely that Australia will introduce the requirement for vessels to have a Ballast Water and Sediments Management Plan (BWMP) before the Convention comes into force internationally from a safety rather than an administrative perspective. Australia will ratify the Ballast Water Convention as soon as it comes into force internationally.

There is a push for the shipping industry to financially contribute to the pest monitoring surveys of existing pests about to be undertaken in 18 ports in Australia. SAL continues to urge Governments that such surveys be initially funded by the States and/or ports, but has agreed to consider other funding models for future surveys which are needed to be held every two years, if there was a proven benefit to shipowners. Regarding the general issue of cost recovery for Ballast water management SAL continues to argue that the ‘wheel not be reinvented’ and that the future use of onboard treatment of ballast water be factored into the proposal.

Harmful anti-fouling systems for ships

24 contracting States including Australia representing 16.63% of the world’s tonnage, have ratified the AFS Convention (25 States representing 25% world tonnage is required). This Convention may be anticipated to enter into force in the second half of 2008. (Twelve months after the entry-into-force criteria have been met).

EU had legislation already in place banning the use of organotin compounds on ships flying flags of an EU Member State from 1 July 2003. This regulation had provisions that would not allow any ship with an organotin based anti-fouling system to enter any EU port or offshore terminal from 1 January 2008.

New bio-hull fouling inspection regime

Following close consultation with SAL and other stakeholders by the Department of Agriculture, Fisheries and Forestry as well as the Australian Quarantine Inspection Services (AQIS), the Australian Government announced that all vessels arriving in Australian waters after 1 July, 2008 could be subject to inspection to determine if their hull contains any exotic marine pests. Arriving vessels will be classified as moderate or high risk for the inspection regime to apply and if such pests are found, AQIS will have the power to order that the vessel’s hull be cleaned before being allowed to leave the port.

SAL member’s vessels are generally classified as low risk. The Australian Shipowners Association in close consultation with the Defence Science and Technology Organisation (DSTO) has developed some voluntary guidelines for commercial shipping to adhere to which will reduce the incidence of bio-fouling. The SAL Technical Steering Group had considered the document to be well drafted with practical guidelines based on current practices which should not result in any additional costs to shipowners. SAL has thus supported the establishment of these guidelines.

Channel deepening in the Port of Melbourne

There were major advances in progressing this project in 2007. The Supplementary Environmental Effects Statement was completed and SAL made a written submission and attended a hearing of the Panel that was established to address this second statement on the potential environmental effects of the project. The problems that were identified in the initial Environmental Effects Statement had been rectified given the significant extra work which had been done to identify and minimise the impacts on plants and animals and establish a more environmentally sensitive approach. The Panel recommended that the Government proceed with the channel deepening project on the basis of the SEES this was eventually accepted by the Victorian Government and subsequently the Federal Government.

Opponents of the project have made light of the effect the lack of depth is already having on large container ships which have been deployed in our major trade routes. They have disputed SAL’s claim that four container ships in every ten are already seriously affected and that clearly this proportion will steadily grow in the years to come as more large ships are introduced. SAL has pointed out that those ships are unable to load to full capacity at the port of origin thus sacrificing many thousands of tonnes of cargo in order to negotiate Port Phillip Heads and the channels which lead to the berths. Similarly, thousands of tonnes of export cargoes are and will continue to be forgone in order for those ships upon departure to clear the channels and heads at high tide. Quite apart from the substantial loss in revenue by the shipping company this negates the enormous economies of scale that would otherwise benefit importers and exporters if their cargoes were part of a capacity load.

The Premier of Victoria announced in the early part of 2007 in his then capacity as Treasurer, that two separate reports have found that the project, if approved, would generate a net national benefit of between $1.9 billion and $2.2 billion over 30 years on the most conservative assumptions. The media release by Government indicated that the independent economic analysis had been commissioned by the Departments of Treasury & Finance, and Infrastructure, and prepared by PriceWaterhouseCoopers and Monash University’s Centre of Policy Studies.

Ports Minister, Tim Pallas has correctly observed that maintaining the competitiveness of the port of Melbourne is vital to the ongoing prosperity of Victoria. Channel deepening will save industry $43 million per annum, starting in 2009, which would steadily rise to $87 million in 2015 and $582 million pa by 2035.

Mr Pallas went on to point out that channel deepening would:

• Have a positive impact on aggregate consumption and investment, 
• Provide additional investment for regional Victoria, and
• Create additional jobs, peaking at 2,200 during the construction phase.

It is disappointing that in the light of these benefits that the Victorian Government could not make a greater contribution then the $150 million that they have to this almost $1 billion project and that the Federal Government was not able to financially contribute given the national significance of this major infrastructure development.

Despite the attempt by the Blue Wedges Coalition to take legal action to stop the project progressing, initial dredging began on 8 February, 2008.

SAL supports attention being directed at improving the turning basin for East and West Swanson dock and the earlier their planned development of Webb Dock as a new container terminal.

SAL was represented at the Victorian Essential Services Commission Hearing into the impact of port planning on competition and has drawn attention to the SAL Submission which pressed for an earlier start to Webb Dock, at the same time urging that there should be no inordinate delay in extending the berths at Swanson Dock to enable both Terminal operators to optimise their operations. It appears that some recognition has been given to the views expressed by SAL and the process for developing Webb Dock is likely to be advanced. The port will be paying particularly close attention to trade through the port for this and subsequent years, in order to closely monitor future trade growth.

Review of port competition and regulation

At a Council of Australian Governments (COAG) meeting in 2006 the Commonwealth, State and Territory Governments signed the Competition and Infrastructure Reform Agreement (CIRA), which requires each jurisdiction to undertake a review of port competition and regulation. SAL made submissions to inquiries conducted in Victoria, Queensland and New South Wales. The Treasury in Western Australia is conducting a similar exercise.

Port of Brisbane – third stevedore

Hutchinson Port Holdings Limited (HPH) had been chosen as the preferred operator of the new container berths. SAL has always supported the introduction of competition as long as it was a viable proposition and was keen to see the introduction of a third stevedore at least in the three main East coast ports. SAL welcomes competition and the efficiencies and improvements that it would bring. The volume of container traffic through Brisbane, Sydney and Melbourne are 17%, 33% and 35% respectively.

Port charges

Port charges were also increased in a number of ports. SAL continues to monitor and challenge the ports on the justification of price increases, especially when the increases have been over and above the CPI rates.

Publicity was given to the number of rate increases by service providers and port authorities in Australian ports in the Shipping Australia magazine.

Port congestion

There has been considerable attention drawn to the hours of operation of empty container depots and the availability of shipping agents after hours to address queries that may arise during this period, due to the strong growth in trade in the major container ports. SAL has called on empty container parks to extend operating hours (opening an hour earlier and staying open one hour later each working day over this period) and for all stakeholders, including carriers, to take advantage of these additional opening hours and for transport operators to utilise the weekend and after-hours ‘slots’ made available by the marine terminal operators . A survey of shipping companies has revealed that the majority provide for an after-hour contact to resolve any problems that may arise in empty depots.

With the problems associated with delays caused by the surge in trade some transport companies had requested SAL to assist in obtaining waivers/reduction in demurrage invoices. SAL has no authority to agree to any such requests on behalf of members and trucking companies had been informed to discuss container detention terms and conditions with shipping companies individually.

Container detention – data transparency

There had been a request for shipping companies to consider authorising empty depots to copy their electronic messages on container movements to e-commerce service providers, which will enable ‘alerts’ to be sent to clients before the expiry of the ‘free time’ and subsequent advice as containers go into ‘detention’. Investigations revealed that a number of members have already set up or are in the process of setting a system whereby various parties in the supply chain are automatically advised prior to the expiry of ‘free time’, therefore it was decided that there is no value in setting up a ‘common’ system. SAL is of the view that there should be more discipline amongst the transport companies, as all information on when the empty containers are to be returned are shown on the Delivery Order. It appeared that in some cases the parties named on the Bill of Lading are endeavoring to absolve themselves of their contractual obligations and third parties are now trying to pass on their responsibilities to shipping companies.

Victoria - Port Amendment Bill to improve port operations

SAL made a submission to a Bill introduced into Parliament clarifying the charging of wharfage and channel usage fees and removing price controls for some services, such as towage in Geelong, Portland and Hastings, in line with the recommendations by the Essential Services Commission in 2004 and enables the Port of Melbourne and the Victorian Regional Channels Authority to carry out dredging operations more effectively.

The Maritime Security Identification Scheme (MSIC) commenced on 01 January 2007 with no major disruption to trade resulting from access restrictions. Problems associated with procedures for terminal access for agents, visitors, contractors, pilots, linesmen ships’ crew were all resolved in a practical manner.

The booklet released by the Attorney-General to raise awareness about risk management and business continuity amongst small and medium sized enterprises, ‘Good Security-Good Business’ emphasising the importance of businesses being prepared for an incident and the value of having plans in place to respond and recover as quickly as possible, was a very useful guideline.

SAL is represented on the Maritime Industry Security Consultative Forum, held under the auspices of the Office of Transport Security (OTS), which is in the process of reviewing maritime security procedures and policy to work towards a more efficient process with the introduction of a new regime on 1 July 2009 (five years since the introduction of the ISPS Code). SAL is involved in the review whereby all security plans will need to be reconsidered by mid 2009, but a holistic approach is being adopted whereby all port security plans can be approved along with the confidential parts of individual facilities. The whole thrust is moving away from ‘prevention’ to ‘response and recovery’ from an incident, but still maintaining a close watch on prevention. A task force has been appointed within OTS to consider changes to legislation and look at the Maritime Security Action Plan with legislation being introduced to Parliament in spring 2008.

Passenger ship security

SAL is represented on this Working Group. A review carried out by the Department of Tourism had indicated that OTS should re-evaluate procedures for the screening of cruise ships, passengers and their baggage in ports around the Australian coast (especially in unregulated non-capital city ports). It still remains unclear as to what is an unregulated port and for security purposes such ports can be quite different from quarantine proclaimed ports. There will also be tightening of security at cruise terminals.

AusCheck

The Australian Government has established a centralized government background coordination agency that will be responsible for the coordination and assessment of background checks on persons requiring access to security Zones in the maritime and aviation sectors. This agency (AusCheck) has been setup as a cost recovery service. This service was previously provided by DOTARS with the only cost being for the AFP criminal history check. The change to AusCheck has resulted in Issuing Bodies incurring increased costs which are being passed on to MISC applicants.

SAL had made submissions to AusCheck, expressing concern over the additional costs and had suggested that AusCheck should also assume responsibility for not only coordinating and conducting centralised background criminal and security checking, but also take over the role of the ‘Issuing Body’ for MSICs. AusCheck had provided a detailed breakdown of costs to SAL, which appeared to be reasonable; however there has been no move by AusCheck to take on the role of an ‘Issuing Body’ as it does not have the legislative backing from Government.

US requirements for hundred percent of container screening overseas

The US President has signed into law a Bill requiring 100% screening of containers at the overseas load port by 2012, although that implementation date can be extended by one or two years, if the technology is not available. Mexico has also recently introduced a 24 hour advance cargo information requirement, which appears to be at variance with requirements in other countries. The Mexican ‘24 hour rule’ in addition to pre-loading information for containerised cargo also includes pre-arrival information for bulk cargoes. However, the Mexican regulations appear to define bulk cargo only as ‘pure bulk’ and not packaged ‘break-bulk’ cargoes. In the absence of specific rules for packaged bulk cargo, it therefore appears that break-bulk cargoes may also be subject to the same pre-load information requirements as containerised cargo.

Long Range Identification and Tracking (LRIT)

The United States estimates that approximately 3,000 ships would be tracked in any 24-hour period, 450 of which were ships entitled to fly the flag of the United States. As a coastal State they would be seeking LRIT information transmitted by ships operating within 1,000 nautical miles (nm) off its coast and are planning to establish a National LRIT Data Centre (NDC). Australia is contemplating requesting the provision of LRIT information as a flag, port and coastal State and it has been estimated that approximately 2,500 ships would be tracked in any 24-hour period. Australia as a coastal State would be seeking LRIT information transmitted by ships operating within 1,000 nautical miles (nm) off its coast. Australia would be requesting the provision of LRIT information at 12-hour intervals and intends to establish an NDC which, subject to discussions with other Contracting Governments in its region, could be expanded to become a Regional LRIT Data Centre.

Legislation has been passed through Parliament which permits AMSA to pass on LRIT, REEFVTS and AUSREP information to other government agencies (Border Protection Command etc).

Container security

In June 2005 the WCO published its Framework of Standards to Secure and Facilitate Global Trade (‘SAFE Framework’), which sets out guidance for an international customs standard for supply chain security for all modes of transport. The SAFE Framework adopts a risk-based approach and, because of its focus on container security, is centred on the concept of Authorised Economic Operator (AEO) programmes, broadly based on the ‘tried and tested’ US C-TPAT scheme, whereby traders who have fulfilled certain pre-conditions for cargo security are entitled to facilitation benefits, such as expedited cargo clearance. The Framework places a considerable potential burden on trade interests and is very vague about any potential benefits for businesses and there is concern on how the Framework’s provisions would be applied in practice.

144 customs authorities worldwide have signalled their intention to implement the SAFE Framework, and the WCO has been assessing the capacity building needs for individual customs administrations to be able to apply the Framework’s provisions. Australian Customs is very interested in this initiative and has conducted an AEO trial with New Zealand. The results of this trial are being assessed and SAL is part of the stakeholder consultation process.

Carriage of dangerous goods on ships around the Australian coast

SAL continues to counter misleading claims often made by the Maritime Union of Australia suggesting that foreign crews need only check for a visa online quoting their passport and it is usually issued within three days and that these checks under Australia’s new maritime crew visa system are not as stringent as the immigration checks which are applied for other visa’s issued to foreign visitors.

The MUA claimed that dangerous cargoes are carried by vessels registered in Open Registries adds to the security risk because of lax safety requirements and few minimum working conditions.

SAL has issued press releases in response to a call by the Maritime Union of Australia to ban unregulated foreign ships carrying dangerous cargoes in and around Australian port cities, as it is not based on any identified increased risk in Australia.

Australian Maritime Defence Council (AMDC)

SAL is represented on the AMDC which is under the very able chairmanship of Admiral Russ Crane. The Council is examining how Defence and the Australian maritime industry might jointly investigate and collaborate in developing solutions to address the growing people/skills shortage. SAL has been seeking the development of a set of priorities focusing on shared skills sustainment opportunities and articulating a proposed way ahead to provide priority in terms of local maritime industry capabilities that confer a strategic advantage by being resident in-country.

SAL has also been developing with the Navy indemnity arrangements to facilitate exercises involving the boarding of vessels at sea. The Navy proposes to use a Certificate of Currency, which is certificate stating that they have insurance arrangements with a P&I Club as the Act does not allow ADF to provide indemnities. In SAL’s view a Certificate of Currency does not address the possibility of the RAN/ADF making supplementary claims on the ship if one of the boarding party was injured during an exercise say for example on the basis that the ship was not in compliance with OH&S requirements. In this case it would be necessary to have a ‘cross indemnity’, to satisfy the requirements of some shipowners and their P&I Clubs. At SAL’s request, the AMDC has written to the Fleet Commander and Deputy Chief of Joint Operations requesting that they provide as much notice as possible of boarding exercises, so that shipowners and their P&I Clubs could address the issue on a case-by-case basis.

Discussions at the AMDC have also centred around exploring the Navy’s sealift capability.

COAG Review of Chemicals of Security Concern

SAL made a submission regarding the Discussion Paper on the Control of Chemicals of Security Concern, which addressed the issue of chemicals of a security concern being obtained illegally in Australia. SAL was of the view that there are potential benefits for increased security control measures and supported the holistic approach that encourages both industry self regulation and strengthened Government regulation. SAL had suggested the plastics industry association and major chemical importers and exporters in Australia be engaged in developing a new regime as well as an industry self regulation regime. An effective industry self regulation regime could assist in the application of an enhanced compliance regime.

SAL had advocated amending the Government regulation to bring it up to date and make it entirely relevant to the new objectives. SAL did not see the need to spend a lot of time in developing new regulation when in fact a good regulatory system appears to already be in place.

Australian Customs Service

SAL has worked hard to maintain a good working relationship with the ACS over many years and it is gratifying that Customs and SAL have worked together on a range of projects during the course of 2007. That Customs has seen fit to seek the views and input of SAL has meant that in most cases the outcomes are procedurally acceptable to both parties. SAL looks forward to continuing that close working relationship in 2008.

Meeting with Customs CEO

On 28 February, 2007, SAL met with Customs CEO, Michael Carmody, Deputy CEO, Neil Mann and National Director Cargo, Jane Bailey. This meeting followed a similar one in early 2006 and it was pleasing to note that some issues raised then had been resolved but others had not. A range of shipping industry and Customs concerns were discussed and it was clear that both parties left with a better mutual understanding and importantly the resolve to work together towards workable outcomes.

Representation SAL continues to represent the shipping industry on two key senior Customs committees; the Customs National Consultative Committee (Alan Brundish of Five Star Shipping and latterly Brian O’Dea of US Lines) in 2007, and the Cargo Processing Executive Steering Committee (Michael Phillips of Hetherington Kingsbury and Chairman of SAL). These committees advise Customs on policy direction.

Customs procedures re per favour items, ships stores & equipment, mail, oil samples, log books etc

In 2006 SAL had successfully agreed a nationally consistent procedure which recognised Customs responsibility to exert the necessary control over non-commercial goods moving onto or off vessels at all Australian ports and at the same time was administratively manageable for shipping companies. A survey of SAL members regarding those procedures in mid-2007 revealed that no particular problems were being encountered. SAL has, however, encouraged Customs to provide an on-line process for reporting such goods which would further improve the process.

Alternative Cargo Reporting Working Group

SAL, along with other industry sectors, contributed significantly to this project aimed at information about all sea-borne cargo being reported to Customs earlier than the current 48 hours before first port arrival. SAL had advocated adoption of an existing process – the US Customs 24 hour pre-load report. In March the SAL CEO was invited to join a Customs study tour to the UK, Europe and the USA. The Group worked very closely to develop a practical model based on the US model and at the end of 2007 Customs decided that work would be suspended until full details of international developments, particularly with the US 24 hour prior reporting system (with the addition of the “10+2” data elements) and the introduction of a 24 hour prior reporting system in Europe, were available.

Standard Business Reporting Program – International Single Window Project – Maritime Conveyance and Crew Reporting.

In advance of this matter being discussed at APEC, SAL assisted a multi-government-department team to fully understand the vessel and crew pre-arrival reporting requirements. SAL hoped was that this would be a first significant step towards the utopia of reporting once to government for use by multiple agencies. Work on this possibility is continuing.

Cargo reports - Deficient Consignee Information

After nearly two years of negotiation with Customs, agreement was reached whereby Customs agreed that where the consignee information on a cargo report was insufficient for Customs clearance purposes, Customs would source additional information from the corresponding Import Declaration thus relieving the shipping company from the time consuming task of customer liaison and lodging amended reports.

Integrated Cargo System (ICS)

SAL has continued to be represented at every meeting of the Industry Action Group (IAG). The IAG has addressed a large number of deficiencies in the ICS and many of those had been resolved with the result that the ICS had become a more stable platform and was coping with year round demands including the October/November peak import period. The development priorities of the IAG are regularly reviewed and late in 2007 SAL had the opportunity of contributing its “Top 10 Issues” for inclusion in the 2008 IAG work program, viz:

4 Multiple Impending Arrival Notices 4 EDN/CAN numbers 4 Underbond issues 4 Freight Forwarder Indicator 4 Payment of Light Dues (also an AMSA matter) 4 Electronic Final Port Clearance 4 Standardisation of Customs procedures at all ports 4 IMO vessel numbers

Impending Arrival Notices - earlier lodgement

A proposal arose from the Alternative Cargo Reporting Working Group that to facilitate earlier Customs cargo clearance, shipping companies should lodge their IARs earlier to allow customs brokers to submit their import declarations earlier. After investigation, SAL advised Customs that it would actively encourage its members to voluntarily lodge their IARs earlier and that it was impracticable to consider regulatory change in that regard.

Customs legislation

The opportunity for SAL to suggest changes needed to the Acts governing the ACS arose and SAL provided appropriate suggestions and support for other sector recommendations.

Time Release Study

Following successful studies overseas, Customs commissioned a study based on all cargo arriving in the last week of September, 2008, for analysis and release in mid-2008. SAL had agreed to join an industry reference group to qualitatively review the results.

Passenger Movement Charge

Customs sought to introduce a new 30 day after departure payment process utilising a formal three year agreement. After referring the matter to its passenger carrying members, acceptance of the procedure was conveyed to Customs.

Transhipment reporting

Customs invited SAL provide comment upon revised procedures covering the movement of export cargo from one Australian port to another by sea. SAL advised Customs that the procedures were acceptable.

Export cargo repositioned by sea

SAL participated along with other industry sectors in meetings to develop consistent procedures for reporting via the ICS the intra-port or coastal movement of export cargo. The finally agreed procedures were endorsed by SAL.

Australian Quarantine Inspection Service (AQIS)

eQPAR - Electronic Quarantine Pre Arrival Report and Approval to Berth

AQIS has engaged SAL’s assistance in the project of seeking to improve the effectiveness of the Quarantine Pre Arrival Report (QPAR) and Approval to Berth work flow (from ship master to shipping agent and Quarantine officer). AQIS is considering evolving the current QPAR Portable Document Format (PDF) form file into a Smartform and making the Approval to Berth an electronic file – eQPAR.

AQIS expects this evolutionary change to provide a complete facility for electronic file exchange of information throughout the QPAR process. The more effective process of electronic file exchange and reduction in paper is hoped to provide the incentive to move away from paper facsimile transmission. However, facsimile transmissions would remain as a fail safe option.

Before the new processes come into effect, a number of SAL members have volunteered to trial the new eQPAR protocols.

Giant African Snail (GAS)

During the latter half of 2007 AQIS completed a thorough review of the risk management strategies that have been put in place to prevent the infiltration of GAS into Australia. Such review included the examination of inspections that had been performed on containers over a 52 week sample period and involved scientific analysis of onshore treatment and containment options. The key outcomes from such review were:

AQIS will continue with the current external GAS inspection procedures All empty GAS containers are to be internally inspected by industry under the Empty Container Scheme. Industry to be offered the option to direct contaminated containers for cleaning under the External Container Cleanliness Scheme. Treatment options are to be reviewed. The list of GAS Countries is to be reviewed.

Ship Sanitation Certificates

Australia commenced issuing Ship Sanitation Certificates on 15th December 2007. The Ship Sanitation Certificate, which evolved in response to the increasing need to combat Avian flu, SARS and Bio-security issues, replaced the Deratting Certificate.

The Ship Sanitation Certificate does not change the standards required of ships in Australian waters but does broaden certification to help control vectors of diseases of international concern and conditions that could attract them. Conditions on board vessels that could cause or substantially contribute to such illnesses are being targeted.

Australian Maritime Safety Authority (AMSA)

Clive Davidson, the previous CEO of AMSA was farewelled with our best wishes during 2007 and we welcomed the appointment of Graham Peachey as the new CEO. Graham has continued AMSA’s commitment to the continuous improvement in the provisions of its safety and environment protection services and maintaining constructive relations with the stakeholders in the industry. SAL is represented on the AMSA Advisory Committee by its Chairman, Michael Phillips and CEO Llew Russell. SAL is also represented on the AMSA Search and Rescue Committee, the Bulk Shipping Committee and the Navigation Safety Advisory Committee.

Senior executives of AMSA usually attend meetings of the SAL Technical Steering Group to discuss matter of mutual importance.

In 2006 SAL wrote to the then CEO of AMSA seeking direct representation on the National Plan Management Committee (which oversights the measures to prevent oil pollution from vessels and the planning/readiness to deal with any oil spills) as the Australian Shipowners Association has represented SAL on the Committee since 2002. SAL has not, so far, been granted the right of direct representation despite its members making a very significant contribution to the payment of the levies required to support these activities. Nevertheless, we will continue to press for such representation.

AMSA Governance arrangements for Under Keel Clearance (UKC) Management in the Torres Strait

AMSA is currently developing a governance framework which involves AMSA entering into an arrangement with a UKC system certification service provider who will, acting on AMSA’s behalf, certify private sector UKC management system service providers and also undertake periodic audits to ensure an ongoing safe operation. SAL is represented in the advisory committee overseeing the development of the governance framework comprising industry bodies, the Australian Hydrographer, pilotage providers and pilots.

Although SAL was apprehensive of a private company operating a DUKC system in the Torres strait, after considering the TCS Report, SAL now supports AMSA’s governance framework (within AMSA's existing legislative powers) but now favours AMSA being the certifying body who will certify private sector UKC management system service providers and also undertake periodic audits to ensure ongoing safe operation. SAL supports the two competing pilot organisations in the Torres Strait setting up their own UKC system (KeelClear for the Australian Reef Pilots and the OMC system for the Torres Pilots). SAL has asked AMSA to expedite the process, as in SAL’s view vessels with a deeper draft of 12.5 – 12.7m could currently transit the Strait, during favourable tides. SAL has concerns that shipowners will not be able to benefit from any increase in draft in the Torres Strait for quite some time to come if the process is delayed as shipowners are already introducing tonnage with deeper drafts and delays in increasing the minimum draft through the straits will limit their loading capacity.

Payment of Commonwealth Light Dues by EFT

Payment of these dues to AMSA via Customs remains the only pre-departure payment that cannot be handled by EFT. AMSA has undertaken to implement EFT payments once its internal computer system upgrades have been completed.

Marine Orders

The Technical Steering Group has been mindful when considering amendments made to the various Marine Orders throughout the year to ensure that they were practical, cost effective and efficient and in line with international procedures that do not result in an added cost burden to the shipowner.

The following Marine Orders were reviewed:

4 Part 17- Liquefied gas carriers and chemical tankers 4 Part 18 - Measures to enhance maritime safety 4 Part 97 - Marine pollution prevention - air pollution 4 Part 21 - Safety of navigation and emergency procedures 4 Part 3 - Seagoing qualifications

National Maritime Emergency Response Arrangements (NMERA)

With effect from 1 July 2007, the Protection of the Sea Levy that applies to ships visiting or operating in Australian ports of 24 metres or more carrying more than 10 tonnes of oil in bulk, as fuel or cargo, at any time during a quarter when the vessel was in an Australian port, will rise from 3.3 cents to 7.7 cents per net registered tonne (per quarter). This levy will fund AMSA's management of the National Plan to Combat Pollution of the Sea by Oil and other Noxious and Hazardous Substances and the National Maritime Emergency Response Arrangements (NMERA). The Australian Government agreed to the funding of the NMERA on the basis of full cost recovery from the shipping industry through an increase in the Protection of the Sea Levy. AMSA will phase in the required levy rate increase over three financial years commencing in 2007/08, to provide maximum time for the shipping industry to plan and budget for meeting the full cost of the NMERA. The shipping industry saved around $ 13 m in 2006-2007, with AMSA funding NMERA out of reserve funds. The shipping industry is pleased that AMSA will continue to meet over a third of the costs of providing emergency towage arrangements from its accumulated surplus and cash reserves, saving the industry around $ 4.5m in 2007/2008.